May 20 (Bloomberg) -- Warner Music Group Corp. passed on a
higher offer from a group that included Sony Corp. when it
accepted the $8.25-a-share buyout bid from Len Blavatnik, people
with knowledge of the music company’s auction said.

Sony, with Guggenheim Partners and Ron Perelman, was
willing to pay $8.50 a share for Warner Music, or 3 percent more
than the $1.3 billion offered by Blavatnik’s Access Industries,
according to the people, who declined to be identified because
the deliberations were private.

Sony’s offer was contingent on the approval of its partners
and board, one of the people said. In a regulatory filing today,
Warner Music detailed the process that led to the May 6
agreement with Blavatnik. Bidders are given letter names, with
the group offering $8.50 identified as Bidder B Consortium.

Warner will be required to pay Blavatnik’s Access
Industries $56 million if the agreement is terminated under
certain conditions. Blavatnik could be required to pay a reverse
termination fee of as much as $140 million if the deal founders
because of a willful breach on his part.

Warner Music, based in New York, was sued on May 12 in
Delaware Chancery Court in Wilmington by a shareholder who
claims the Blavatnik bid undervalues the company.

Liz Young, a spokeswoman for Sony Music, declined to
comment, as did Amanda Collins at Warner Music.

Warner Music, controlled by private-equity companies, fell
2 cents to $8.19 at 4:15 p.m. p.m. in New York Stock Exchange
composite trading. The shares have climbed 46 percent this year.